AWC Berhad Navigates Macroeconomic Headwinds, Posts Resilient Full-Year Performance and Proposes Dividend
Hello fellow investors and market watchers!
Today, we’re diving into the latest quarterly report from AWC Berhad, a diversified engineering services and facilities management group. As we unpack their financial performance for the fourth quarter and full financial year ended 30 June 2025 (FY25), it’s clear that despite a challenging global economic landscape, AWC has demonstrated resilience, marked by an increase in full-year profit and a proposed dividend for its shareholders. This report provides a comprehensive look at their operational strengths and strategic direction. Let’s get into the details!
Core Data Highlights: A Closer Look at the Numbers
AWC Berhad’s latest financial report shows a mixed but overall positive picture, particularly when viewed from a full-year perspective. The Group managed to increase its revenue and profit after taxation for FY25, a commendable feat in the current economic climate.
Quarterly Performance (Q4 FY25 vs Q4 FY24)
For the individual quarter ended 30 June 2025, AWC Berhad reported a slight increase in revenue but a dip in profitability compared to the corresponding quarter last year. Let’s break it down:
Q4 FY25
Revenue: RM104.37 million
Profit Before Taxation (PBT): RM7.75 million
Profit After Taxation (PAT): RM6.66 million
Basic Earnings Per Share (EPS): 2.05 sen
Q4 FY24 (Corresponding Quarter)
Revenue: RM101.98 million
Profit Before Taxation (PBT): RM10.39 million
Profit After Taxation (PAT): RM6.98 million
Basic Earnings Per Share (EPS): 2.18 sen
While revenue saw a modest increase of approximately 2.35%, the PBT for the quarter decreased by about 25.4%, largely influenced by various factors including an RM2.9 million inter-division receivables write-back in the prior year’s corresponding quarter and lower margin mix in the Rail division this quarter. PAT and EPS also saw slight declines.
Full-Year Performance (FY25 vs FY24)
Looking at the bigger picture, AWC Berhad delivered a stronger full-year performance, demonstrating growth across key metrics:
FY25 (Year-to-Date)
Revenue: RM414.11 million
Profit Before Taxation (PBT): RM31.69 million
Profit After Taxation (PAT): RM24.87 million
Basic Earnings Per Share (EPS): 7.60 sen
FY24 (Corresponding Year)
Revenue: RM398.83 million
Profit Before Taxation (PBT): RM32.45 million
Profit After Taxation (PAT): RM24.57 million
Basic Earnings Per Share (EPS): 6.10 sen
Full-year revenue grew by approximately 3.83% to RM414.11 million. Although PBT saw a marginal decrease of 2.34%, Profit After Taxation (PAT) increased by about 1.21% to RM24.87 million, indicating better tax efficiency or lower one-off expenses. Basic Earnings Per Share (EPS) saw a significant jump of nearly 24.59% to 7.60 sen, a very positive sign for shareholders.
Segmental Performance: A Mixed Bag of Results
AWC Berhad’s diversified business units showed varied performance during the quarter:
- Facilities Division: Revenue in Q4 FY25 saw a 10.1% decrease to RM53.1 million compared to Q4 FY24, primarily due to lower concession revenue. PBT for the quarter dropped to RM768k from RM2.8 million in Q4 FY24, which had benefited from a one-time inter-division receivables write-back.
- Environment Division: This division experienced a 25.8% decline in Q4 FY25 revenue to RM22.0 million from RM29.7 million in Q4 FY24. This was largely attributed to slower project progress in regions like Abu Dhabi and Singapore, leading to a 34.1% decrease in PBT to RM5.6 million.
- Engineering Division: A bright spot, this division recorded a 12.0% increase in Q4 FY25 revenue to RM24.5 million, up from RM21.9 million in Q4 FY24. This growth was driven by higher project progress in the Plumbing segment, which also boosted PBT by 8.6% to RM1.9 million.
- Rail Division: Revenue in Q4 FY25 surged by over 100% to RM12.5 million from RM4.8 million in Q4 FY24, thanks to higher order fulfillment and project deliverables. However, PBT decreased by 73.0% to RM0.5 million, mainly due to a lower margin mix in the current quarter (10.9% versus 44.1% in Q4 FY24).
- Investment Holdings: This segment’s PBT declined significantly from RM10.29 million in Q4 FY24 to RM2.71 million in Q4 FY25, highlighting potential shifts in investment performance or internal eliminations.
Quarter-on-Quarter (QoQ) Snapshot (Q4 FY25 vs Q3 FY25)
Comparing the current quarter with the immediate preceding quarter, AWC’s revenue increased by 5.9% to RM104.37 million. Profit before taxation remained almost similar at approximately RM7.7 million, despite fair value losses on investment properties and other financial assets, as well as impairment of trade receivables. This suggests a careful management of costs and other income streams offsetting these challenges.
Financial Health Check: Balance Sheet and Cash Flow
AWC’s balance sheet reflects a stable financial position. As at 30 June 2025, Net Assets Per Share stood at 70.0 sen, an improvement from 65.4 sen at 30 June 2024. Total Equity attributable to owners of the Company also increased to RM229.07 million from RM211.64 million, a positive indicator for shareholders.
The Group’s total loans and borrowings decreased to RM97.17 million from RM106.95 million in the previous year, showing a reduction in overall debt. This deleveraging is a healthy sign of financial prudence.
From a cash flow perspective, AWC generated a healthy RM28.07 million from operating activities for the year-to-date FY25, up from RM26.47 million in FY24. More impressively, the Group reported a net increase in cash and cash equivalents of RM20.27 million for FY25, a significant turnaround from a net decrease of RM1.87 million in FY24. This strong cash generation positions the company well for future investments and obligations.
Risks and Prospects: Navigating the Future
Despite ongoing macroeconomic challenges globally, AWC’s Board remains cautiously optimistic about the Group’s financial outlook for the upcoming financial year (FY26). This optimism is underpinned by a strong balance sheet and a healthy outstanding order book of RM597 million, which provides clear earnings visibility.
Let’s look at the prospects for each division:
- Facilities Division: Expected to provide steady recurring income from its long-term maintenance concession for the Southern Region and Sarawak until December 2025. Non-concession contracts in commercial and healthcare segments (2-5 years) also contribute. The division has an outstanding order book of around RM270 million, with approximately RM230 million to be recognized in the next three to five years, alongside a sizeable pipeline of new tenders.
- Environment Division: Maintains a healthy order book with secured contracts extending into the next two financial years, anticipating steady project execution and billing progress.
- Engineering Division:
- Air Conditioning: Management anticipates securing a higher order book and, combined with a leaner cost structure, expects a more sustainable performance.
- Plumbing: Ongoing projects are on schedule. The segment is actively engaging clients with value engineering proposals to manage elevated material costs.
- Rail Division: Actively pursuing rail-related projects and procurement opportunities both domestically and regionally. Leveraging established agency and principal representations, along with potential business in service-related segments, this division is strategically positioned to contribute to the Group’s performance over the next two years.
Dividends: Returning Value to Shareholders
In a move that will please shareholders, the Board of Directors has proposed a final single-tier dividend of 0.5 sen per ordinary share for the financial year ended 30 June 2025. The book closure and payment dates for this dividend will be announced in due course.
Summary and Investment Recommendations
AWC Berhad’s latest report paints a picture of a company with underlying strengths, navigating a complex economic environment. The increase in full-year revenue and PAT, coupled with a robust cash flow and a healthy order book, speaks volumes about its operational capabilities and strategic direction. The proposed dividend further reinforces its commitment to shareholder returns.
However, investors should also be mindful of certain points:
- Macroeconomic Headwinds: Global economic uncertainties could impact project timelines and costs, particularly for divisions with international exposure like Environment.
- Margin Pressure in Rail: While revenue for the Rail division surged, the significant drop in PBT due to lower margin mix indicates a need to monitor profitability closely for future projects.
- Segmental Performance Disparities: The mixed performance across divisions suggests some segments might face more challenges than others, requiring ongoing strategic adjustments.
- Cost Management: Elevated material costs, as highlighted in the Engineering division, will require continuous proactive management and value engineering initiatives.
Overall, AWC Berhad appears to be on a stable footing, with clear strategies to leverage its existing strengths and capture new opportunities. The healthy order book and strong cash generation provide a solid foundation for future growth.
Final Thoughts and Your Perspective
AWC Berhad has delivered a resilient performance this financial year, demonstrating an ability to grow revenue and profit despite external pressures. The proposed dividend is a welcome sign for investors. With a substantial order book and clear strategies for each division, the company appears well-positioned for the upcoming year.
What are your thoughts on AWC Berhad’s latest results? Do you believe the company can maintain this growth momentum and manage the identified challenges effectively in the next few years? Share your insights and perspectives in the comments section below!
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